Urban Growth in Seattle

Posted on December 30, 2014 by Steve Laevastu

As we bid farewell to 2014, we can look forward to a continued strong real estate market in Seattle in 2015, driven by not only our strong economy, but also the influx of people wanting to live in the city.

In terms of the job market, Seattle Bellevue Everett Metropolitan Statistical Area unemployment rate is currently at 4.5%, below our ten-year average of 6.1%. In addition to growth in the number of jobs in our area, we are also seeing growth in wages due to the types of jobs we have been adding at companies such as Microsoft, Amazon, and Boeing. However, retail and construction also had positive growth in the past year.

These companies are attracting young, skilled Millennial workers to our city’s core where companies like Amazon have set up shop. In an interview with Jeff Bezos, he indicated that an urban setting set the stage for the type of culture he sought for the company. NBBJ chairman (an architecture firm), Scott Wyatt, pointed to several reasons why this model works: Urban Seattle is growing faster than the suburbs, people want activities close by and don’t necessarily want to own a vehicle, companies want to foster a collaborative environment with not only employees from their own company, but other companies as well, and an urban setting allows for more physical movement. It is clear that if the Amazon model works, we will continue to see growth in the tech sector in the urban core.

We don’t currently have enough housing to keep up with the housing demand in the urban core, which is why rent rates are increasing at the pace they are as well as median home prices. I expect this will continue to be an issue in 2015 as our city amplifies its efforts to keep up with demand.

For example, according to the Seattle Times, there is a new skyscraper coming to town – a tower to replace the current Rainier Square shopping mall which will include eight stories of luxury apartments as well as 35 floors of offices and ground-floor retail. It sits between Fourth and Fifth avenues and Union and University streets on the site of the original University of Washington. This will be the second-highest skyscraper in the city, behind the Columbia Tower. However, this is still in the planning stages and will not be completed for several years.

These factors point to investment appreciation if you own real estate in Seattle. Our market is strong and all signs point to a robust 2015. Give me a call to learn more: Steve Laevastu: 206-226-5300 or sold@windermere.com.

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Urban Land Institute Names Seattle in Top 10 Markets to Watch in 2015

Posted on November 25, 2014 by Steve Laevastu

Urban Land Institute has released their “Emerging Trends in Real Estate” report for 2015 and the news for Seattle is favorable!

The Institute points to the principle of the “24-hour city” which needs to be adopted by urban areas in order to have a thriving downtown. They note that downtown transformations need to combine “housing, retail, dining and walk to work offices to regenerate urban cores” in order to increase investment for single family and multi-family housing. While most of the emerging, revitalized urban centers aren’t true 24-hour cities, they have certainly expanded from 9-5 town into “18-hour markets”. According to the report, investors are attracted to markets with “vibrant urban centers”. Some of Seattle’s most vibrant neighborhoods fit this bill.

In the report, the Urban Land Institute points to different Markets to Watch in 2015. The basis for these being markets to watch is the demand for “desired assets” which is expected to drive prices up and returns down and subsequently the need for alternative investment options which yield higher returns. One strategy noted for this in the report was the potential for investors to look at markets close to a major metropolitan area.

Seattle ranked 8^th on the list overall which measures investment, development, and home building potential in 2015. Portland, Oregon ranked 16^th and Tacoma ranked 62^nd (this is the first year Tacoma has been measured as a separate entity outside of Seattle).

Another factor that was examined was population growth. Between 2010-2013, the urban population growth in Seattle rose 6.9% to 2.88 million people which also helped its placement in the “good market” category.

Technology is a local driver of employment in Seattle and the millennial generation is flocking in to take those jobs. It is a “top capital destination” which attracts institutional and local investors.

The report predicted that the job market in Seattle will expand 2.6% in 2014-2015.

We have a lot to be thankful for in Seattle this Thanksgiving. A robust job market, strong population growth, and of course, we live in the most beautiful place in the country! Happy Thanksgiving to you!

View Urban Land’s Emerging Trends in Real Estate report

Multitudes of Millennials in Position to Purchase in Seattle Metro Area

Posted on September 29, 2014 by Steve Laevastu

According to the National Association of REALTORS® the Seattle Metro Area is one of the top ten markets in the country with the Millennial generation poised to lead the charge of first time homebuyers. Seattle, along with metros such as Austin, Dallas, Denver, Des Moines (Iowa), Grand Rapids (Michigan), New Orleans, Ogden, and Salt Lake City have strong job markets with jobs that appeal to this generation and the demand for housing hasn’t priced first time homebuyers out of the market like in New York, Los Angeles, and San Francisco.

According to NAR Chief Economist, Lawrence Yun, “NAR research finds that there are…metro areas millennials are moving to where job growth is strong and home ownership is more attainable. These markets are well-positioned to soon experience a rise in first-time buyers as the economy improves.”

The homeownership rate for young adults (under the age of 35) was 43% in 2005 (the peak) and the rate has fallen from that peak to 36% in the first quarter of 2014.

NAR measured current housing conditions, housing affordability (measured by incomes, interest rates and median home prices), job creation, and population trends across the country in metro areas that have a large millennial presence. NAR expects that as life events present themselves (marriage, kids) millennials will want to settle down and purchase a home rather than rent and live in close quarter. As long as market conditions hold and affordability is maintained, millennials are poised to be our next wave of first time homebuyers.

What does this mean for current homeowners? I expect demand will continue to be strong in our region as job growth is strong in our region. Over the next few years, if you own a home with market value under about $400,000, I expect that price point to increase in demand unless our builders complete new homes to meet that growing need. If you have questions for me or would like to learn more, please give me a call or send me an email: (206) 226-5300 or sold@windermere.com.